- Joined by 5 Korean construction majors with 136 Korean SMEs
- Turning point to Korean companies which hit an“Export Cliff”

■ Korea Trade Insurance Corporation (K-sure, www.ksure.or.kr, Moon Jae-do, president) announced on Monday, Mach 6, that it would finance U$3 billion for a Kuwait oil refinery project in which major construction companies and small plant equipment manufacturers of Korea take their part.

○ The project is to improve oil refining facilities located in Mina Al Ahmadi and Mina Abdullah of Kuwait, and sponsored by Kuwait National Petroleum Company (KNPC). Five Korean construction majors will build U$7.1 billion worth of a plant with the requiring procurement provided by 136 small Korean plant equipment manufacturers which also join in the project as contracted partners of KNPC.

■ This project is one of the largest kinds in terms of financing volume, the total project amount reaching as much as U$14.6 billion, and the value of project financing alone amounts to U$10 billion. Seven ECAs from 5 countries are involved in the project for provision of U$6.2 billion of export credit.

○ Among the ECAs, K-sure, in particular, provides almost a half of the total ECA funding. In the process, the Korean ECA also successfully brought out participation of ten international commercial banks as creditor banks for the project.

■ From the onset of the project, K-sure has actively supported the bids of Korean companies by announcing its funding decision while, at the same time, reinforcing its cooperative tie with Kuwait Petroleum Corporation (KPC), a top 5 global oil company as well as the parent company of KNPC, through signing of two financing MOUs in 2015.

○ Such endeavors resulted in the successful conclusion of U$3 billion of export credit support, helping Korean companies enter into the Kuwait construction and plant market thanks to the close partnership forged between K-sure and KPC.

○ Meanwhile KPC is expected to bring a strong drive of overseas business to Korean companies struggling to overcome the challenging overseas project market. The company has already announced its 20-year investment plan with U$300 billion of new investment. At a tender held in October 2015, five Korean EPC companies won U$3.4 billion worth of contracts from their bidding on the Al-zour refinery project which mobilizes U$14 billion of finance in total. In addition, two Korean EPC companies won the entire U$3 billion contract of LNG terminal project in March 2016.

■ Mr. Moon Jae-do, president of K-sure stated that “With the prolonging trend of low international oil prices, it is very critical for public finance agencies like K-sure to provide a competitive financing at a time when oil majors of the Middle East are shifting their attention to the international financial market with a keen interest.

○ K-sure will continue to strengthen its cooperative financial ties with major sponsors of the world, and reinforce the bid-winning competitiveness of Korean companies while supporting small Korean equipment companies’ participation in global projects“

【 A picture of KNPC oil refinery】